It’s better to be right than first.
That’s why the Boeing Co.’s chief financial officer said Boeing isn’t in a hurry to come out with a replacement to the company’s best-selling plane, the 737.
“I’m more concerned with having the right product than having the product come out first,” Boeing’s James Bell said during a Goldman Sachs investors conference Wednesday.
With Boeing’s competitor Airbus struggling to bring its A380 superjumbo jet to fruition, industry analysts look to Boeing to create the next single-aisle aircraft.
Launched in 1965, the Renton-built 737 jet was last revamped in the 1990s. It has seen more than 6,000 orders over its lifetime, with 2006 orders topping 559 as of Oct. 24. The aircraft’s continued success creates its own problem of sorts in devising a replacement.
Boeing needs a good understanding of customer requirements for a new single-aisle aircraft, Bell said. Until then, “there’s not going to be a significant effort to replace it.”
Airbus’s A320 family competes with the 737. As of the end of September, the European plane-maker had received 190 orders for the A320 group this year. Airbus has picked up 4,455 requests for the A320 over the lifetime of the jet.
Even if Airbus beats Boeing to market on a replacement for the 737 and A320 planes, Boeing won’t leap into a replacement if it doesn’t have a significant advantage, Bell said.
“Being first is interesting, but being right is key,” he repeated.
Some in the industry may have thought Airbus beat Boeing to the punch with its 555-seat A380 superjumbo jet. But, Bell said, Boeing believes the “right” plane to introduce in the market today is the 787, which will accommodate between 210 and 330 passengers.
When Airbus announced its third delay on the A380, its then-chief executive Christian Streiff hinted at scrapping the A350 program – Airbus’s answer to the 787 Dreamliner. After Streiff stepped down in October, his replacement Louis Gallois vowed to go ahead with the A350.
Paul Nisbet, an industry analyst with JSA Research in Rhode Island, suspects that Boeing will wait until Airbus outlines its commitment on the A350 before revealing its plans for a 737 replacement. With a troubled A380 line and research and engineering costs for a new A350 line, Airbus likely couldn’t afford to tackle the next single-aisle aircraft.
Boeing could wait until 2008 to get started on the 737’s replacement, he said. That’s the same year the company will deliver its first 787 Dreamliner.
“That would be an ideal time to get a jump on them,” Nisbet said.
Airbus really doesn’t have a choice but to match Boeing’s 787 offering, Nisbet added, ruling out the possibility that the European plane-maker could abandon its A350 program. In the segment that makes up 40 percent of the commercial market, Airbus has been “getting beaten pretty badly,” Nisbet said.
Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
